February 2012

July 30, 2010

Why does the workplace of
established organizations so often resemble a Dilbert cartoon? Managers are
(generally) smart, highly educated people: why are they acting in ways that dispirit
employees and frustrate the hell out of customers?

Dilbert, the cartoon, was first
published by Scott Adams on April 16, 1989, but its intellectual origins came earlier.

The skill set and the attitudes
of the Dilbertian manager were identified in a famous HBR article in 1977: Abraham
Zaleznik’s “Managers and Leaders Are They Different?”Harvard Business Review. 1977, 82 (1),
p74-81. The article has been republished a number of times by HBR, as recently as
just this week, showing that HBR, at least, still thinks the piece relevant to
today.

In the article, Zaleznik deftly describes
the attitudes of the Dilbertian manager.

First,
the manager focuses attention on procedure and not on substance. The
manager focuses attention on how the
decisions are made, not what decisions
to make. That’s because the manager is typically working in a bureaucratic setting
where the goals of the organization are neither clear nor perceived as worthwhile.
In the place of goals that provide meaning at work and in work, there is a hierarchical
structure, precise role definitions, and elaborate rules and procedures, which
often conflict: managers have no way of knowing what is the right answer. The
only safe place is to focus on process.

Second,
the manager communicates to subordinates indirectly by “signals”, rather
than clearly stating a position. The traditional rule-driven bureaucracy requires
both managers and workers to leave their personal views and attitudes behind in
the entry lobby, before they enter the workplace. In this world, the managers’
personal views are irrelevant. The only safe way to communicate is to make use
of the rules and deploy indirect “signals”, which obscure who wins and who
loses. The manager can hide behind process: “It is not what I believe that
matters: It is what the system requires.”

Third,
the manager plays for time. With conflicting rules and procedures, and conflicts
about priorities between different senior managers, managers have no way of
knowing what the right answer is. The idea of using their own judgment is at
odds with the idea that they left their own views in the entrance lobby. Hence
playing for time and waiting for the dust to settle are ways of always being on
the winning side. These CYA routines are played out, up and down the hierarchy.

These Dilbertian practices enable
a middle level manager to survive. Scott Adams has made a fortune by depicting
how these practices play out on a daily basis in large organizations around the
world, while frustrating both employees and customers.

One puzzle is why this kind of
behavior went on and on, without any apparent way to bring it to an end.

In some ways, the 1977 Zaleznik article was responsible for this.

The article provided the insight that
traditional managers operate differently from leaders who could inspire people
to act in new ways. That might have been useful if it had led to
an examination of whether the skills and attitudes of pure managers were
appropriate, even in 1977.

The problem? That would have meant reconsidering some of the
fundamental assumptions of management. So what actually happened is that it led
to was the idea of dual tracks. We have leaders to inspire people to change,
and managers to grind out the execution. Two separate groups of people.

Inevitably the two groups worked at cross-purposes. As much as leaders
inspired employees with new ideas, managers tended to dispirit those same
people with their Dilbert-cartoon style management. The result was counter-productive,
but it provided the intellectual justification for managers continuing to
manage just as they had for lo, these many decades.

John Kotter also played—unwittingly—a role in preserving the life of Dilbert-style
management. In his influential HBR article, What
Leaders Really Do (1990, (3), 103-112), which was mainly about leadership,
he also in passing endorsed bureaucracy as the only way to manage:

"Management
develops the capacity to achieve its plan by organizing and staffing—creating an
organizational structure and set of jobs for accomplishing plan requirements,
staffing the jobs with qualified individuals, communicating the plan to those
people, delegating responsibility for carrying out the plan, and devising
systems to monitor implementation."

Without such bureaucracy, “organizations
tend to become chaotic in ways that threaten their very existence.” The fact
that such bureaucracy kills innovation, dispirits both managers and workers and
typically ends up frustrating customers was not noted. This way of managing was
simply necessary to avert chaos.

The “two types of people” theory also
got support when Kotter said:

“Some people have
the capacity to become excellent managers but not strong leaders. Others have great
leadership potential, but, for a variety of reasons, have great difficulty
becoming strong managers. Smart companies value both kinds of people and work
hard to make them part of the team.”

Although Kotter didn’t subscribe
to the view that one person couldn’t in principle be both a leader and a
manager, he did imply that leader-managers were rare. For the most part,
leaders and managers were two different kinds of people, with different skill sets.

And so the practical dichotomy
between managers and leaders continued. Most of the creative thinking about
running organizations was pursued under the heading of “leadership”, while writing
about “management” essentially consisted of minor patches and fixes to
Dilbertian bureaucracy, which was seen as necessary to fend off pending chaos.

The thought that chaos could be
averted without Dilbertian bureaucracy has been around for some time.

For many decades, Toyota appeared to have pulled
off the trick through “lean manufacturing”, but companies raised on Dilbertian bureaucracy
found Toyota hard to replicate.

Companies like W.L.Gore & Associates seemed
to have found a way to use self-organizing teams to produce scalable efficiency
without bureaucracy.

Agile software development was still another
variant of self-organizing teams has been implemented in thousands of organizations
around the world with dramatic success, but it had difficulty spreading into
general management, in part because the terminology was software-specific.

Brave CEOs like Vineet Nayar at HCLT are inventing
new management practices to undermine bureaucratic practices.

The force of social media has also compelling
companies to adopt more open leadership, as described by Charlene Li.

Why haven’t these practices penetrated
the mainstream of management thinking so as to dispatch Dilbertian management
to its well-deserved place in the dustbin of history? These instances tended to
be viewed as isolated context-specific instances that lacked a general theory
of how they could be applied more widely.

The need for such a theory was made
explicit in Gary Hamel’s excellent article, Moon Shots for Management (HBR,
February 2009), in which 35 management gurus spelled out the criteria that a
new theory of management would need to meet.

In the meantime, however,
established organizations are staffed with people schooled in traditional
management principles. Management textbooks continue to assert that this is the
way to manage. Business schools grind out thousands of graduates who have
imbibed the philosophy. Armies of consultants are afoot in established
organizations, following the principles of traditional management and
continuously searching for expenses to cut, rather than how they can add value. All this is necessary, it is said,
to avert chaos. And so Dilbertian management continues to thrive, largely
unabated.

Scott Adams must be happy.

The world is in desperate need of
a radically different kind of management, which was founded on sound, fully
integrated managerial principles and which avoids the horrors of Dilbertian
bureaucracy.

My forthcoming book on radical
management aspires to describe what such management looks like, where it is
happening and provide a general theory as to why and how it works. For more
information, go here:

"Managers and leaders operate from two completely different skill sets. Saying all managers should also be leaders is dangerous." --BestOfHBR (on Twitter)

I woke up this morning astonished to find myself accused by Harvard Business
Review (on Twitter) of saying something dangerous.

Whoa! I was not just “wrong”. Or “misguided”. Or “mistaken”. Or “misinformed.” Or
“ignorant.” None of the above. I had done something far, far worse. I had said
something that was dangerous.

Now when someone in authority accuses you of saying something dangerous,
you know several things. First, you know that you have become a matter of
concern to the authorities; so you need to keep your wits about you. Second,
you know that you have, for better or worse, put your finger on some hallowed belief
that is sacred to the power structure. Thirdly, you know that the authorities
have emotional and other capital stored in that belief. And finally, you know that
because of the emotional capital involved, further interchange is unlikely to
be fact-driven or evidence-based, but rather pursued by labeling the interlocutor
with terms like “dangerous”, in the hope that this will silence debate.

And what was the dangerous thought that had so troubled this distinguished
institution? I had put forward on Twitter the rather obvious and common sense
proposition that “managers need to be leaders.”

My thought was a response to a HBR posting of an ancient HBR article: Abraham
Zaleznik’s “Managers and Leaders Are They Different?” Harvard Business Review. 1977, 82
(1), p74-81. This article has been republished in 2004 and now again in 2010, it is presented
as though it is cutting edge thinking. My Twitter post suggested that this old
chestnut could do with some re-thinking.

The reply from HBR gave as the reason as to why my comment was "dangerous"
was that “managers and leaders operate from different skill sets.” As
it happens, that is something that I totally agree with.

The point that I have been making on this blog and elsewhere is that
the skill set of a pure manager who cannot lead is obsolete. It might have been
good enough in 1977, but it’s not good enough in 2010.We need to turn the page and move on.

Thus the skill set of a pure manager comes with a set of attitudes that
Zaleznik described 1977 as: “First, the manager focuses on procedure and not on
substance… Second, the manager communicates to subordinates indirectly by “signals”…Third, the manager plays for time.” What you
have here of course is the perfect picture of the manager in a Dilbert cartoon.

What are the consequences of this Dilbert-cartoon style management?
Fortunately, we have a comprehensive study performed by Deloitte’s Center for
the Edge, spelling it out in shocking detail, of which some of the headlines
are:

The rate of return on assets has—remarkably—declined
by 75% since 1965.

The life expectancy of a firm in the Fortune 500
has declined from around 50 years in 1965 to less than 15 years today, and is
heading for 5 years, if firms continue on their current path.

Executive turnover is accelerating.

Only one in five workers is fully engaged in
their work.

These disastrous results for traditional management were the kind of evidence that
led Gary Hamel and other leading management gurus to the conclusion that we are
desperately in need of “a management revolution.” Moon Shots for Management (HBR, Feb 2009).

In a world where continuous innovation is required and where the
productivity of a firm depends on the energy and enthusiasm of their knowledge workers
to achieve that, the skill set and attitudes of the pure manager, who operates
like a Dilbert cartoon, are obsolete. They have no place in the modern workplace.

Instead, we need managers who focus above all on substance, who communicate
directly and interactively rather than indirectly by signals, and who aim at truly
delighting clients by enabling people to get things done now, rather than playing for time.

In effect, we need managers who also have leadership skills and who can both
achieve disciplined execution and inspire the energies and insights of the
people doing it.

A peculiar feature of traditional managerial discourse is the unspoken
assumption of its inevitability. It is as though the practices of traditional
management—hierarchy,command-and-control, tightly planned work, competition through economies
of scale and cost reduction, impersonal communications—reflect timeless truths
of the universe, so obvious that there is scarcely any need to articulate them,
let alone re-examine them. In reality, these managerial practices arose as a
response to a specific set of social and economic conditions. Those conditions have
changed. The economic and social context of 2010 is very different from 1977.

In some ways, the Zaleznik article of 1977 was an intellectual advance in
that provided the insight that traditional managers operate differently from
leaders who can inspire people to act differently. That might have been a
useful insight if it had led to a re-examination of whether the skills and
attitudes of pure managers were appropriate, even in 1977. But that would have
meant reconsidering some of the fundamental assumptions of management. So instead,
what it led to was the idea of dual tracks. We have leaders to inspire people
to change, and we have managers to grind out the execution. Two separate groups of
people.

The problem was of course that the two groups worked at cross-purposes.
As much as leaders inspired employees with new ideas, managers tended to dispirit
those same people with their Dilbert-cartoon style management. The result was
counter-productive, but it provided the intellectual justification for managers
continuing to manage just as they had for lo, these many decades.

Now it's true that Harvard Business Review publishes some marvelous articles from time
to time. Moon Shots for Management
(2009) is one such example. There are many others.

But trotting out ancient articles like the Zaleznik piece and
suggesting that it represents cutting edge thinking for today, is not the best
of HBR. It is the worst.

Fortunately, today there are many who are practicing and writing about the
radically different kind of management that combines management with leadership.
Vineet Nayar writes about it in his book, “Employees First, Customers Second.”

Charlene Li writes about it her insightful book, Open Leadership, which I will be
reviewing shortly in Strategy & Leadership.

I received a Tweet from BestOfHBR as follows: "@stevedenning 'dangerous' was poor word choice. We agree with your latest blog post! Next article on leadership coming later today."

In one sense, I am relieved to hear that we are apparently on the same page, after all.

In another, I am disappointed that my career as a "dangerous man" has been so disappointingly brief!

Yet maybe my career is not over. Thus is this really the end of hostilities, or is it simply a tactical retreat by HBR? If the whole of HBR really agreed with my post about managers, as BestOfHBR says they, then we would expect a retraction in respect of the all the other HBR articles that have subscribed to and endorsed Dilbert-style management. How likely is that to happen? If so, when?

July 27, 2010

In his campaign for the presidency, Barack Obama promised a
government of unprecedented openness. As president, progress towards openness
has been less than remarkable, to put it politely.

Openness
about Afghanistan

The issue was highlighted this week, when WikiLeaks.org, posted
tens of thousands of classified military field reports about the Afghan war. It
says its goal in disclosing secret documents is to reveal “unethical behavior”
by governments and corporations.

The New York Times reports that WikiLeaks’ critics range
from the military, which says it jeopardizes operations, to some open
government advocates who say the organization is endangering the privacy rights
of others in favor of self promotion: http://nyti.ms/bv0qOC

As it happens, Wikileaks.org withheld some 15,000 documents,
because of such concerns. In their judgment, at least, the 91,000 documents
that were released were free of those issues.

Is President Obama celebrating the openness that has been
thrust upon him? Well, not exactly.

“We don’t know how to react,” one frustrated administration
official said on Monday. “This obviously puts Congress and the public in a bad
mood.” http://nyti.ms/ahVgdI

Much of the response seems to be to find and punish the
leaker. Both Republicans and Democrats
in Congress called for Defense Secretary Robert M. Gates to open an
investigation into the matter. http://bit.ly/bLNJPF

Ranjay Gulati helpfully distinguishes four levels of organizational
openness in (Re)(Organize For Resilience:
Putting Customers At The Center Of Your Business (Boston: Harvard Business
Press, 2009)

Level 1: “You take what we make.”

Organizations at this level typically say that customers are
at the center of the universe, but in practice continue to view the marketplace
entirely through the lens of their own goods and services. The customers are
incidental to the enterprise. This was the kind of management described in Frederick
Taylor’s Principles of Scientific Management. It is still the case in most
public sector organizations.

Level 2: “We believe that our offerings
will be useful to you.”

Firms at this level pay attention to and study their
customers, but again, they focus on their customers through the lens of the company’s
goods and services, while ignoring the larger problems that the customers may
be trying to solve. Most established firms today are still at Levels 1 or 2.

Firms at this level have made the leap from looking at their
world from the perspective of their own products and services to looking at the
world from the customers’ perspective and solving the customers’ problems.
Firms at this level empathize with their customers and are continually evolving
their offerings to meet those issues.

An example of this would be P&G’s
beinggirl.com community for teenage girls: they are seeking to understand and help
solve the problems of these girls, while at the same time pushing P&G’s
feminine care products, in the hope of making these girls life-long customers. Charlene
Li & Josh Bernoff: Marketing In The
Groundswell (Boston: Harvard Business Press, 2009) pp 70-79

Firms at this level are no longer concerned whether the
inputs it uses to solves customers’ problems are its own or assembled through a
network of partners. This involves a intellectual, structural and emotional
transition.

An example of this would be Li
& Phung, a $15 billion company, headquartered in China and orchestrating 14,000
factories in China and around the world. Li & Fung owns practically nothing.
Its role is to figure out a way to orchestrate factories, so that by coming
together, they can achieve performance that they could never achieve individually.
But all are working on extreme specialization. For example, for a particular
garment, Li & Fung might source the yarn from Korea, dye it in Thailand,
weave in Taiwan, cut it in Bangladesh, assemble it in Mexico, and bringing
zippers in from Japan and come up with something that is better than anyone
else in the world can do. The Power of
Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion by John
Hagel III, John Seely Brown, and Lang Davison, pp83-85

Governments
and openness

The US Government, like most public sector organizations, particularly
the military, are still marooned in level 1.Essentially: “You take what we make.” Organizations at this level
typically say that customers or their stakeholders are at the center of the universe,
but in practice they continue to view the customers or stakeholders entirely
through the lens of their own goods and services. The customers or stakeholders
are incidental to the enterprise.

So it is the openness that Wikileaks.org has
generated about the Afghan war. The military is running the war, and the
release of the documents makes it more difficult to go on doing what they are
planning to do anyway, regardless of what the citizens think. The openness
created is perceived as a problem, not a solution.

It would take a intellectual, emotional and organizational revolution
for the US Government, especially the military to advance even to level 2, let
alone aspire to move to the higher reaches of openness at level 3 or level 4.

Unfortunately, at this time, there are few signs of that
revolution happening in this government.

For that to happen, the powers that be would have to
understand and embrace radical management.

July 24, 2010

The industrial age is over. Stop improving products. Start improving lives. Make it matter

Umair Haque

What’s involved in managing human talent? How does HR become
influential in and share responsibility for the strategic human resource
decisions made around the executive table? How does HR create real value for
the organization? How does HR deliver on making the staff (really) the
organization’s most valuable asset?

A historic opportunity is now opening up for HR, with the advent of radical management.

The
history of the human factor

HR is traditionally concerned with the people side of the organization.
Advocacy for the importance of this role has a long history. The ideas—giving
people a voice in how to do work and using teams to get things done—are obviously
not new. In fact, for almost a hundred years, people have kept discovering—and
rediscovering—the importance of teamwork.

In the 1920s, Mary Parker Follett was giving lectures at
Harvard Business School and Oxford University on the principle of non-coercive
power sharing and emphasizing “power with” rather than “power over.”

In 1930s, Elton Mayo argued that attention to employees as
people could relieve the monotony and boredom of their work. He claimed that
the experiments at the Hawthorne Project showed that paying attention to
workers and their concerns could improve performance even without doing
anything about the complaints. Years later he would romanticize the Hawthorne
experiments as instances where “six individuals became a team and the team gave
itself wholeheartedly and spontaneously to cooperation in the experiment.” As a
result, “they felt themselves to be participating freely and without
afterthought, and were happy in the knowledge that they were working without
coercion from above or limitation from below.”

In 1938, Chester Barnard argued that to survive, an organization
had to satisfy the motives of its members while attaining its explicit goals,
and foster cooperation among its members.

In 1943, Abraham Maslow put forward his theory of human
motivation, with a pyramidal hierarchy of needs, both psychological and
physical, and capped by the highest human need of all, which Maslow called
self-actualization.

By the 1950s, human resource departments were using the
rhetoric of teams, team spirit, and winning as a way to creating positive
attitudes toward the organizational goals.

By 1960, MIT professor Douglas McGregor questioned the
assumptions of traditional hierarchy that people are lazy, which he labeled
Theory X. McGregor urged managers to explore Theory Y: that people want to do a
good job and wanted to have responsibility.

In 1971, the report by the Department of Health, Education
and Welfare, Work in America, commissioned by the Nixon administration,
concluded that the workplace would have to change to fit the aspirations,
attitudes, and values of workers. People wanted meaningful work that provides
satisfaction. Job redesign and increased participation of workers were
necessary for America to be competitive.

In 1982, Tom Peters and Robert Waterman announced in their
book, In Search of Excellence, that it was attention to employees, not work
conditions themselves, that has a dominant effect on productivity.

As recently as 2007, Gary Hamel, at the time of publication
of his book, The Future of Management,
could once again rediscover the human factor: “Probably for the first time
since the industrial revolution, you can’t build a company that’s fit for the
future unless it’s fit for human beings.”

Why
didn’t the human factor stick?

Why did we see this incessant “rediscovery” of the human
factor and teams? How could management theorists plausibly claim the same thing
over and over, shouting, “Eureka!” as though they had made an extraordinary
discovery? How could managers continue to be amazed by these “discoveries”? Why
did the traditional mental model of hierarchical bureaucracy remain largely
unscathed?

There are a number of reasons. The most important is that traditional
management and HR are still largely a prisoner of machine-age thinking. As Gary
Hamel writes:

Management was originally invented
to solve two problems: the first -- getting semiskilled employees to perform
repetitive activities competently, diligently, and efficiently; the second --
coordinating those efforts in ways that enabled complex goods and services to
be produced in large quantities. In a nutshell, the problems were efficiency
and scale, and the solution was bureaucracy, with its hierarchical structure,
cascading goals, precise role definitions, and elaborate rules and procedures.
(“Moon Shots For Management,” HBR, February 2009.)

The goal of the organization is seen as producing goods and
services so as to make money for shareholders. Hierarchical bureaucracy is the means
of achieving the goal, through cost reduction flowing from economies of scale,
downsizing and outsourcing. In this world, it follows that employees are simply
another set of “things” to be manipulated to achieve the lowest cost result.

In this environment, the HR department tends to become a menial
accomplice in the management task of manipulating the employees to achieve the
lowest cost result. The idea of doing work through teams and treating people as
people are adopted sporadically as tactical moves to achieve particular
short-term results, but are fundamentally at odds with the long-term philosophy
of cost reduction through command-and-control. They are aberrations that don’t
stick. Statements about “employees being our most important assets” were
seen for the empty words they usually were.

A peculiar feature of this traditional managerial discourse
is the unspoken assumption of its inevitability. It is as though the practices
of traditional management—hierarchy,command-and-control, tightly planned work, competition through economies
of scale and cost reduction, impersonal communications—reflect timeless truths
of the universe, so obvious that there is scarcely any need to articulate them,
let alone re-examine them. In reality, these managerial practices arose as a
response to a specific set of social and economic conditions. When those conditions
change, the validity of the principles can become an issue.

The
world has changed: 1. The shift to knowledge work

The first change is the continuing shift from semiskilled
work to what economists call knowledge work. When modern management was being
invented almost a century ago, most employees were semiskilled workers, such as
laborers and production line workers. Doing their work required little training
and practically no brainpower. They were expected to do what they were told.
How they felt about it was irrelevant.

Work today increasingly requires the application of
brainpower and knowledge. Workers include lawyers, doctors, accountants,
marketers, administrators, software developers, and researchers with Ph.D.s.
These workers—knowledge workers—are expected to identify issues, think through
problems, and come up with new solutions. The shift from semiskilled work to
knowledge work has changed the relationship between those in charge and those
doing the work.

The world
has changed: 2. Organization Needs the Commitment of the Workforce

Second, the engagement of the workforce has become a serious
productivity issue. As sociologist Alain de Botton points out, “Once it became
evident that someone who was expected to remove brain tumors, draw up binding
legal documents or sell condominiums with convincing energy could not be
profitably sullen or resentful, morose or angry, the mental welfare of
employees commenced to be an object of supreme concern.” Yet although the
mental welfare of employees is recognized as a supreme concern, that concern
hasn’t led to supreme success: only one in five of the global workforce is
fully engaged.

From the firm’s point of view, unused talent is a serious
productivity problem. And it’s not merely sub-optimizing for the firm. Since
the workers themselves are aware that they are not being allowed to give their
best and are spending their time unproductively, both managers and workers
become disgruntled. Internal processes grind away, and the customers become
more and more an afterthought. The fact that current management practices
prevent a full human flourishing is in itself an economic, management, social,
and moral problem of the first order.

The
world has changed: 3. The customer takes charge

Customers are no longer willing to be treated as an
afterthought. The twentieth-century firm wasn’t sharply focused on pleasing
customers. That was because, by and large, it wasn’t necessary. Demand was
soaring, and firms could sell whatever product or services they generated.
Oligopolies had control of the marketplace.

This worked as long as there were only a few channels of
communication and a few sellers and a few products, and buyers had limited
information and little choice. But the situation changed. A few channels of
communication turned into multiple channels of communication. A few sellers
turned into many sellers. A few products turned into the clutter of multiple
products. Once buyers had instant access to reliable information and became fed
up with being spammed, the old model fell apart. The result was a fundamental
shift in the balance of power from sellers to buyers. Now, unless clients are
delighted, they can—and will—go elsewhere. So businesses have to change their
focus from producing goods and services to an explicit goal of delighting
clients.

The
implications of the changes

Traditional management viewed employees as “human resources”
i.e. not people, but “things” that could be controlled and manipulated and
exploited. So long as the firm was merely providing goods and services to the
marketplace, it could give commands to employees as to what to do and control
them to make sure that they did what they were told. Once the challenge became
one of having interactions with customers and creating a steady flow of
innovations and new value to customers so that they would be delighted, the
firm depended on its employees to generate those innovations and interactions.
Smart firms discovered that the energy and enthusiasm and insights of its
employees—now often highly educated—couldn’t be bought or directed or commanded
and controlled. Instead, employees had to be inspired to contribute—a radically
different and more difficult challenge. Again it was a shift from a simple linear
manipulation to a complex interaction.

The
bankruptcy of traditional management

The futility of continuing with traditional management is
underlined by the findings a huge study—the Shift Index—done by the Deloitte’s
Center for the Edge:

·The rate of return on assets of US companies is
one quarter of what it was in 1965.

·The life expectancy of firms in the Fortune 500
has declined from around 50-60 years to just 15 years, and is heading towards 5
years, unless something changes.

·Executive turnover is accelerating.

·The “topple rate of leading firms is
accelerating.

·Only one in five workers is fully engaged in
their work.

Radical
management and the new goal of work: Delighting clients

Fortunately a new way of organizing and managing work has
emerged. Radical management begins by clarifying the goal of work: to delight
clients and stakeholders. In the twentieth century, the traditional view of an
organization was an entity principally aimed at the production of goods and
services or making money for the company. These goals don’t get anyone’s juices
flowing. That’s because goods, services, and money are means, not ends.

In today’s world of global competition and continuous
change, a firm that isn’t continuously adding new value for its clients and so turning
them into active promoters of its goods and services is unlikely to endure. If
the firm is making profits while leaving customers disgruntled, then the
profits are “bad profits” and are generating brand liabilities that will have
to be repaid one day. The true bottom line of any organization is whether and
to what extent it is delighting clients and stakeholders. A firm that adopts
client delight as its goal is also making inroads on improving job
satisfaction. Improving the lives of others is something worth believing in and
fighting for.

Radical
management: Teams now become central

Adopting the goal of client delight leads to the
self-organizing team. That’s because inspiring client delight requires
continuous innovation, and a self-organizing team is the management arrangement
most likely to generate this innovation. Self-organizing teams are well suited
to accomplish this complex task; when they are properly executed, they draw on
all the talents, energies, and passion of the workforce. Instead of teams being
a sporadic tactic to solve unique problems, teams replace bureaucracy as the
standard way of getting work done.

The
key role of HR in radical management.

The shift from traditional management to radical management
is an inevitable one, since radical management is two- to four-times more
productive than traditional management. The economics will be inexorable.

HR departments have a crucial role to play in enabling and facilitating
the shift, because it is essentially one of moving from a world where employees
and customers are treated as “things” to be manipulated to a world where employees
and customers as thinking, feeling, caring human beings with whom there are relationships.

The first step is for HR departments to become familiar with
the principles and practices of radical management so that they help guide the transition and
educate their organizations about what’s involved.

A second step—symbolic but important—will be to reconsider their
own label: the human resource department.

Using terminology that refers to human beings as “resources”
i.e. things, is a remnant of traditional machine thinking. What does it imply to
call human beings “resources”? Using such terminology unwittingly degrades human beings into things to be manipulated, exploited,
and then thrown away.

The issue is thus not so much putting the H back into HR,
but rather taking out the R.

HR becomes the “People Department” as at Southwest Airlines,
or something similar.

A third step is for the incumbents of the newly named People
Department to step up to the plate and become leaders—inspiring the change,
educating the CEO, the managers and the staff and persuading them to leave
behind the 20th Century machine-age world of traditional management
and step into the future: radical management.

In effect, radical management offers a massive opportunity for HR, if HR elects to grasp it. In the world of traditional management, HR was condemned to play a menial role of helping the management manipulate the employees in the most cost effective way. With the advent of radical management, with its focus treating people as people, and inspiring the staff to give their very best on a daily basis, there is a huge opportunity for HR to lead the organization into the 21st Century.

I have just completed a three
minute YouTube video entitled, “What is radical management?” You can see it
here. http://youtu.be/SqAzA7PiBWY

The process of making the video was
fascinating. It involved a complete mind-shift. That’s because a video is the
opposite of a book which is 100% words. A video conveys complex ideas to a
large extent through images and music. In a book, the goal is to be comprehensive
and precise. In a video, the goal is to be evocative and allusive.

Music has privileged access to
our feelings. I spent a lot of time looking for music that could powerfully convey
the horrors of traditional management as well as the possibilities of doing
things doing things differently.

Images are also key. When so many
organizations are being run in a way that is unproductive for the organization,
dispiriting to those doing the work and frustrating for the customers for whom
the work is done, it is easy to become fatalistic and think: this is the way
things will always be. The right images can help jolt us out of our complacency
and make us see: this must change!

I had fun making the video and I
hope you enjoy it. If you enjoy it, please share with your friends.

I will be making more videos about
various aspects of radical management and posting them on my YouTube channel
at: http://www.youtube.com/user/stevedenning1.
In order to make sure you see them all, you can subscribe to the channel there. Enjoy!

July 21, 2010

Why do great marketing ideas get killed so often? Why is the
Chief Marketing Officer the most endangered inhabitant of the C-suite: average
time on the job—a measly 26 months, versus 44 months for the CEO, 39 months for
the CFO, and 36 months for the CIO? Why is there a war in the boardroom between
management and marketing?

In a fascinating book, War in the Boardroom: Al and Laura Ries set out to explain
why. They describe 25 ways in which traditional management tends to kill great
marketing initiatives.

The authors distill several lifetimes of marketing
experience in cataloging the arenas in which the war between managers and
marketers is fought:

1.Traditional management deals in facts, while marketing manages perceptions. In the marketplace,
customer perceptions are more important than facts: it’s doesn’t matter that your
product or service is actually better, unless customers actually perceive it as
better.

2.Traditional management concentrates on the product, while marketing concentrates
on the brand. In the marketplace, the
brand (e.g. Coca-Cola) is often more powerful than the product.

3.Traditional management tends to fixate on “owning the brand”, while marketing
prefers to dominate a category of
products or services. In the marketplace, if you can dominate a category, as
Porsche or Lexus does, the brand usually takes care of itself.

4.Traditional managers focus on more of the same, by lowering costs or
adding features or extending the brand (e.g. Microsoft), while marketing focuses on launching
different products, e.g. Apple.

5.Traditional managers tend favor a full line of products and services.
Marketers tend to favor narrow line
of products and services that dominate their category.

6.Traditional managers naturally tend to expand the brand, thus diffusing its
impact, while marketers try to contract
the brand so that a tighter focus can dominate its category.

7.Traditional managers strive to be the “first mover” and be the first to have
their product in the market, while marketers strive to be the “first minder”, i.e. to be the first to
lodge the brand in the mind of the customer.

8.Traditional managers expect a “big bang” launch, while marketers are
more patient and plan for a slow takeoff.

9.Traditional managers target the soft center of the market (the average
customer) and end up in bland mediocrity, while marketers prefer to avoid the
middle and target one of the ends:
either the high-end (luxury) or the low-end (dirt cheap), where they can
dominate the category.

10.Traditional managers typically use many words to describe their products
and services (“this car has comfort, style, low maintenance, energy efficient, low
depreciation”) whereas marketers would prefer to focus on, and own a single word (Toyota = reliability).

15.Traditional management
believes—unrealistically—in milking the brand with perpetual
growth, while marketers recognize that products mature: perpetual growth of any product or brand is
unrealistic. So marketers create new products and brands.

16.When a new category begins to emerge,
traditional management instinctively tries to kill it, while marketing instinctively tries to build new categories, as in “blue
ocean” strategies.

17.Traditional management instinctively tries to communicate the facts, while marketing
focuses on positioning the product
or service within the minds of the primary customers, so that these customers perceive the
product or service differently.

18.Traditional management wants customers for life from a single product or brand while marketing is
happy with a short-term fling, while it creates something else.

20.When under threat, traditional management tries
to copy the competition, while
market does the opposite of the
competition.

21.Management hates a name change, while marketing recognizes that sometimes the name needs to
change. For instance, where would Ralph Lifshitz be today, if he hadn’t changed
his name to Ralph Lauren?

22.Management is bent on adding multiple features, where marketing would prefer to have one
really good one.

23.Management is seduced by the possibilities of
extending the brand through multi-media,
while marketing is concerned about loss
of focus.

24.Management focuses on milking the cash cow in
the short-term (e.g. Microsoft) while marketing focuses on creating new
opportunities for the long term (e.g. Apple).

25.Management does the obvious, logical common sense thing, and pursues linear thinking, with a focus on
execution. In this world, one plus one equals two. Marketing, by contrast, recognizes that
linear thinking doesn’t always work in a complex
world in which the challenge is to position products and services in the minds
of fickle clients. In this world, one plus one may equal eleven.

Strength:
Brilliant, rich account of the ongoing battles

The great strength of the book is, as part of the subtitle
indicates, “Why Left-Brain Management and
Right-Brain Marketing Don't See Eye-to-Eye”. The authors offer a brilliant and
rich account of the daily battles that go on in boardrooms. They give example after
example of why managers fail to understand what marketing is driving at.
Wonderful stuff.

There are two areas where the book is less helpful. One
concerns the nature of the problem we are dealing with. The second concerns
what to do about it.

Issue:
What exactly is the problem?
Why do managers think, speak and act the way they do? The authors suggest that
it is because managers are left-brainers. “If you’re the CEO of a major
corporation, chances are good you are a left brainer. Before you take a
decision, you want to be supported by facts, figures, market data, consumer
research.” While it is clear that corporations are dominated by left-brain thinking, it is less clear why this is so. The authors offer no evidence for the broad-brush conclusion that C-suite denizens are mostly left-brainers.

A more nuanced approach might have taken into account the research
of Gary Williams and Robert Miller, summarized in the article, Change The Way You Persuade (HBR, May
2002). They concluded that CEOs are not like peas in a pod, all alike:

“Specifically, we have found that
executives typically fall into one of five decision-making categories: Charismatics can be initially exuberant
about a new idea or proposal but will yield a final decision based on a
balanced set of information. Thinkers
can exhibit contradictory points of view within a single meeting and need to cautiously
work through all the options before coming to a decision. Skeptics remain highly suspicious of data that don't fit with their
worldview and make decisions based on their gut feelings. Followers make decisions based on how other trusted executives, or
they themselves, have made similar decisions in the past. And controllers focus
on the pure facts and analytics of a decision because of their own fears and
uncertainties.”

By classifying all CEOs as “left-brainers”, the authors tend
to fall into the simplistic linear managerial thinking that they deride.The
reality is that managers are a mixed bag, with a combination of a left-brain
and right-brain thinking: without some of both, it is hardly likely that these
people would have advanced to become CEOs.

Why do these smart people think, speak and act the way they do? Rather than attribute managerial decisions to left-brain thinking, it may be more promising to look deeper and examine why left-brain thinking dominates decision-making.

The reality is that CEOs live, work and breathe in a world that is dominated by a common mental model. This mental model explains what constitutes good management. As a result, CEOs come to view the world through the lens of this mental model.

What is the mental model? It's not hard to find out. Reading standard management texts or attending to
the articles in management journals indicates a familiar set of components. As
Gary Hamel writes:

Management was originally invented
to solve two problems: the first -- getting semiskilled employees to perform
repetitive activities competently, diligently, and efficiently; the second --
coordinating those efforts in ways that enabled complex goods and services to
be produced in large quantities. In a nutshell, the problems were efficiency
and scale, and the solution was bureaucracy, with its hierarchical structure,
cascading goals, precise role definitions, and elaborate rules and procedures.
(“Moon Shots For Management,” HBR, February 2009.)

It is this mental model--scalable bureaucracy--that
drives the traditional management behavior that the authors so richly describe in
their book, and the problems that it causes.

Issue:
What to do about it?

The subtitle of the book also says that it will say what to do
about the war in the boardroom. Their solution? They seem to suggest that all
business leaders need to do to succeed is to think like a marketer.In other words, the authors are suggesting:
end the war by according the victory to marketing, and stop paying attention to
those pesky “left-brain managers.”

Such an argument will hardly sit well with managers. As Andrew O’Connell notes in HBR (June 2009):

The authors conveniently neglect to
examine the business from executives’ or shareholder’s viewpoints, dismissively
labeling most managers “left-brain types”. They make no attempt to understand
the logic behind brand expansion or management’s views on product quality.

And so the war goes on.

If the root cause of the war is a defunct mental model of
management, then the solution lies in replacing it with a mental model that is more
appropriate for the times—a model that exhibits the virtues of both the client-centered thinking of
marketing and thedisciplined execution of traditional
management.

Enter
from stage right: radical management

Radical management focuses the whole organization on the
goal of constantly increasing the value of what the organization offers to its
clients. Once a firm commits to this goal, marketing thinking makes perfect
sense.

Once the firm fixes on the marketing goal of delighting clients, then traditional command-and-control bureaucracy ceases to
be a viable organizational option. Instead the firm will, like Southwest
Airlines or Starbucks, naturally gravitate towards some variation of
self-organizing teams as the default management model for organizing work.
That’s because it is only through mobilizing the full energy and ingenuity of
the workforce that the firm can generate the continuous value innovation needed
to delight clients. Not surprisingly, those doing the work find more
satisfaction when they are given the opportunity to contribute their best in
order to delight clients.

To ensure self-organizing teams are viable on a sustained
basis, work has to be organized client-driven iterations; with value delivered
to clients with each iteration, in a environment of radical transparency;
continuous self-improvement and interactive communications.

When these
principles are put in place, you get the benefits of both disciplined execution and a sharp
focus on marketing.

When the principles and practices of radical management are
well implemented the results include two- to four-times gains in productivity,
continuous innovation, deep job satisfaction and client delight.

By providing a way to garner the benefits of both the client-centered thinking of
marketing and thedisciplined execution of traditional
management, radical management offers a way to give marketing thinking its
rightful place at the very top of organizations, without jeopardizing
disciplined execution. In effect, it is a way to end what the authors so brilliantly
describe, i.e. the war in the boardroom.

One was timing. It’s hard for people to make a commitment in July for a
4-week event in October-November. For many people, it’s hard to predict what
will be happening that far ahead and what their time availability will be.

So one suggestion was to make
clearer what the time involvement would
be. The event is really a four week conversation with Seth Kahan and
myself. There will four video lectures, which can be viewed at any time. There
will be live discussions, which will be recorded and can be listened to at any
time. And there will be online Q&A that will be continuous over the four
week period. So even if your schedule is very tight in the period, you could
still get almost the full value from the event by logging on, whenever your time
permits.

The third suggestion was to make
clearer what the value proposition
of the online event would be. We have now done our best to clarify the description of the
event on the web. Where else in the world can you learn how to manage in a way
that generates high productivity, continuous innovation, deep job satisfaction
and client delight? Where else can you get 4 weeks of continuous access to two
instructors? Where else can you get such a wealth of downloads?

The fourth subject was price. There was a range of views. For
some, there was surprise that the price for such an event was not in four
figures, given the value being offered. At the other extreme, one person said
that all such events should be free. In between those extremes, some said the
price was reasonable. Others said a somewhat lower price would really help them to
register.

What to do? Although obviously we do offer a great deal of free material on our websites and in this blog, we will have certain costs to cover in putting on such an event, so “free” is not a real possibility in this case. We have tried to stay away from
any kind of four-figure “celebrity pricing”. We are offering a deep discount
for groups of ten or more. But otherwise, we have concluded that the current pricing
offers a reasonable balance between covering costs and making the event affordable
to as many as possible. We hope that participants will agree.

The truth will set you free, but
first it will piss you off.Gloria
Steinem

Even a wise man is wrong thirty
percent of the time. A fool at least seventy percent.Taiichi Ohno

For most of my life, I thought storytelling was an ephemeral
way of entertaining ourselves, something that only children and primitive
people took seriously. It was quite a long time before I changed my view. I
began seeing reasons to think differently in early 1996 when I noticed that a
simple story—the Zambia story—seemed able to communicate the idea of knowledge
management better than abstract propositions. When I told a story, my
presentation would work. When I didn’t the presentation ended in turmoil and
confusion. But I continued to think: “analytic is good—narrative is bad.” I
began using stories as a matter of survival. But it really took me another eighteen
months before the penny really dropped and I started taking seriously the idea:
maybe my whole way of thinking about analysis and narrative is fundamentally
flawed.

The catalyst for the change in my thought came for me at a presentation
I gave in North Carolina at the end of 1997. People were pressing me to say why
the World Bank, one of the stodgiest change-resistant organizations in the
world, was making such rapid progress in knowledge management. So I put up a
slide saying that “maybe it had something to do with storytelling”. Immediately
after that, somebody from Harvard Businesss School Press came up to me and
suggested I write a book about it. So I thought to myself: “If Harvard thinks
there is something in this nonsense, maybe I should check it out!” And so began
a journey that has led to the writing of five books and a whole new career
based on leadership storytelling.

Why did it take me so long? Eighteen long months? For one thing,
a big part of my whole self-image was the idea that I was a smart, analytic
kind of person. I was good at analysis, and my whole experience at school, at
university, and in the workplace had reinforced the idea that analytic was
good, narrative was bad. To be a “storyteller” was the last thing I wanted to
be seen as. For another, everyone in my milieu held similar views. Storytellers
were good-for-nothing gadabouts, who had never gotten around to having serious
jobs.

It took several years of direct daily experience that
contradicted that view before I was willing to entertain the possibility of the
opposite: maybe storytelling is a powerful tool for leadership communication?
It took me another couple of years to think through the implications, which
began to emerge in my book, The
Springboard (2000), and several more years before I worked out the further
implications in The Leader’s Guide to
Storytelling (2005) and The Secret
Language of Leadership (2007). Quite a journey.

What made it difficult, and take so long, was that my whole
self-image was bound up in the idea of myself as a highly competent, analytic
kind of person. Seeing through that illusion involved discovering the “conceptual
spectacles” that I was viewing the world with and that I didn’t even know I was
wearing. It also entailed creating a new set of spectacles through which to
view the world. Overall: more than a decade of work.

New technology is easier

I have had similar reactions to new technology, although not
to the same degree. When I first encountered the phenomenon of email, some thirty years ago, I
asked: why would I need that? Same thing, when I encountered the web, blogs,
Twitter, cellphones with cameras in them, and so on. Why, I would ask, would I
need that? Eventually I came to see why I needed each of these things, but adopting
them didn’t really involve a change in self-image. And besides everyone else
was jumping on the bandwagon. So it was more like going with the flow than
swimming against the tide.

Swimming against the tide

That’s what the shedding of deeply held illusions is like:
swimming against the tide. Everything is pulling you to go in the opposite
direction: the conventional wisdom, common sense, the education system, the financial
reinforcements of doing what everyone else is saying and doing, universities,
textbooks, the popular press—all these elements conspire to tell you: “Keep
doing and thinking and speaking the way you always have because that’s reality.
That’s the way things should be done.” It takes some courage to stand up and
say, “No! That’s wrong. There’s a different way of looking at things. The rest
of the world is out of step. Here’s how the music should be played.”

My First Encounters with Management

The idea that there is a fundamentally different way to
think about management also took a very long while to germinate in my mind.

My first serious job was in a law firm in Sydney, Australia
in the mid 1960s. It was the leading firm in Sydney, Allen Allen &
Helmsley, but by today’s standards, it would be seen as a very small firm:
around fifty lawyers. It was still run in a fairly collegial fashion, without
much management at all. Lawyers did their own thing and the place bumbled along
without much in the way of systems or processes or hierarchy. It wasn’t a bad
place to work. A little claustrophobic and uncollaborative at times, perhaps, but
overall, not too bad.

My first real encounter with traditional management was when
in 1969, I joined the World Bank, a big international organization of which
Robert McNamara had just become president. It sounded odd in those first few
conversations when people spoke about “the front office” in hushed tones, and
about McNamara as though he was some extra-terrestrial being. It was a steep
hierarchy. It didn’t feel comfortable. I had an uneasy feeling that this wasn’t
a very productive way to work. But everyone went along with it. And in time, I
mastered the system and became a “chief”, then “an assistant director” and
eventually a “director”.

As a chief or assistant director, I was in charge of twenty
or thirty people and it didn’t feel much different from being a staff member.
It was when I became a director with several hundred people under my sway that
I became almost radioactive. I could see people fawning and bowing and scraping
and keeping their distance. I told them to stop acting in such a silly way. But
it made no difference. I was now, willy-nilly, part of the power structure, and I
was as much a victim of it as those whom I supposedly “controlled”.

Of course, I wasn’t able to control them at all. They mostly
did what the culture dictated. Initially, the most I could do was make marginal
suggestions for change and hope that some of them would be adopted. Over time,
I was able to develop a different way of managing and a different departmental
culture that stood me in good stead when I became director of knowledge
management and set about systematically persuading the whole organization to
adopt knowledge management.

In all these change efforts, I was still thinking of the
changes I was introducing as adjustments to the main corpus of management. I
was assuming that if you made added some fixes (storytelling, knowledge management,
teams, innovation) and made some adjustments to the standard way of managing,
organizations would become more sensible and rational and better places to
work. It never really dawned on me that the whole corpus of management was
rotten to the core.

The first inkling that I got was in early 2008 when it began
to dawn on me that these management fixes that I was pursuing—storytelling,
innovation, teams, knowledge management—weren’t holding. They didn’t sustain. With
luck, they flourished for a while, and then something would happen—a merger, a reorganization,
a new management, a cost-cutting drive, whatever—and the management adjustment would
be one of the victims. It would be back to business as usual. So I began trying
to figure out why this was so. It still hadn’t dawned on me that there was
something fundamentally wrong with the whole conceptual apparatus of
traditional management.

Radical Management

My new book initally started out as an effort to figure out how one could systematically and reliably create high-performance teams--something that traditional management textbooks said wasn't possible. When I had figured out how to do that, I was still thinking to a large extent that my book had made discoveries about high-performance teams. It was only later when I joined the dots that I saw that I had stumbled on something much bigger--a rethinking of the entire corpus of management thought.

It wasn’t until the August 2009 that that particular light began
to dawn. I was having a meeting at my publishers, Jossey-Bass and I was
describing the new way of working covered by my new book, and I was explaining
that “everything was different.” One of the editors said, “It sounds like
radical management.” That was really the first time that I discovered that what
I was talking about was really a fundamentally different way of managing.

I went back and read the basic management textbooks and I
suddenly realized: this is all wrong. These books are riddled with illusions
and false assumptions that make no sense. The books sometimes mention the various
management fixes that I was interested in, but in a dismissive way. The basic
thinking at the front of these books was wrong. Footnotes at the back of these
books about delighting clients and self-organizing teams needed to be at the
front of the book in bold headlines, and many of the underlying assumptions
thoroughly revised. It wasn’t any particular book that was wrong: they were all
wrong. I could then see that radical management meant a revolution.

What was the intellectual basis for the revolution?

Fortunately, at this very moment, Deloitte published the
Shift Index, which catalogued in detailed studies of 20,000 organizations over
fifty years, and across all industries, and produced devastating evidence (e.g.
ROA of US firms is one-quarter of what it was in 1965) that traditional
management was systematically running big organizations into the ground. They
examined all the main industries and the picture was consistent. Something was terribly,
terribly wrong.

It was a crisis, although not a crisis with a big, obvious,
singular, seismic event, like the financial meltdown of 2008 or the Gulf oil
spill of 2010. Those events were symptoms of a deeper problem. So the
government response of new financial regulations or a moratorium on off-shore
drilling didn’t deal with the root cause.

The disease of traditional management was more like a
cancer, steadily eating away the livelihoods and dreams of countless millions
of people around the world.

The collective delusion of success

The illusion that traditional management is a success is
held in place by a vast apparatus of habits, practices, corporate cultures, university
teaching, management textbooks, and healthy helping of inertia. More important,
the whole self-image of vast numbers of people is embedded in a way of working
and managing that is unproductive, frustrating customers and creating
disgruntled employees. The evidence is now plain, but still no one acts.

There is thus an unwillingness to take the evidence seriously,
because doing so would put in question the self-image. Lang Davison, a
co-author of The Power of Pull (2010) was telling
me recently about the workshops that were run by the Deloitte’s Center for the
Edge with their startling new findings, such as that the rate of return on
assets of US companies is one quarter of what it was in 1965. The executives
were unwilling to take the studies seriously. “They are living a delusion,” Lang
said, “it’s all the more powerful as it’s a collective delusion, as reflected
by the capital markets. We even heard executives say, in response to our
findings about declining ROA, that it couldn’t be that bad if the equity
markets still value corporate institutions so highly.”

So we now have an iron-clad case for change and a whole
society that is now ready to address it. How will it happen? How long will it
take?

The example of science

A similar awakening occurred in science in the early seventeenth
century when people like Francis Bacon started saying that we have to stop
taking on faith what Aristotle said and find out what actually happens. We had to
pay more attention to truth than to authority.

Initially there was resistance in the universities.

“In those times, the universities were teaching the wrong
things. Neither Galileo nor Descartes, for example, was able to pick up the
mathematical skills he so desperately needed during the course of his
university education. Galileo had initially studied medicine at Pisa but left
before completing his degree, and in 1583 started learning mathematics at his
father’s house from the Florentine court instructor Ostilio Ricci, who taught
military fortification, mechanics, architecture, and perspective. Descartes
similarly learned his mathematics in a practical context: having studied law at
Poitiers, he picked up and refined his mathematical skills in the armies of
Prince Maurice of Nassau and Maximilian I, to which he was attached from 1618
to 1620.” Gaukroger, S. The Emergence of
a Scientific Culture. Oxford: Clarendon Press, 2006.

It took decades before rigorous observation was embodied
consistently in scientific practice. But eventually it happened. In science,
truth generally triumphs over power. Scientists didn’t necessarily become
paragons of honesty in all their dealings with other human beings, as Francis
Bacon’s conviction for corruption in 1621 demonstrated. Scientists merely
adopted certain practices to encourage openness in regard to scientific
experiments and principles.

The Prospects for Radical Management

In the case of radical management, I believe things will
happen more quickly, because the pressures of global competition will force the
change. Other cultures such as China or India don’t have the same cultural
baggage as US management. They are the upstarts and are willing to try doing
things different with spectacular results, as in Vineet Nayar’s HCLT in India
or Li & Phung in China. If US and European firms don’t change, their
industries will be decimated.

The failing economics of traditional management will force a
change, one way or the other.

In some firms, it will be a long drawn out battle, with the battlefield
strewn with broken hopes, shattered careers and lost jobs. The economic loss
and human suffering will be immense.

In other organizations, it will happen easily and quickly
and intelligently, because the management is willing to re-examine even deeply
held beliefs about how the world works and consider the possibility of thinking,
speaking and acting differently.

Obviously I am doing my best to facilitate the latter
outcome rather than the former. I hope others will join me.

July 14, 2010

Traditional management is a
disease that knows no national boundaries. Today on Bastille Day, it is
important to note that even something as irreproachable as French cuisine—the gold
standard of international cooking—is subject to decay and ruin. Wall Street Journal
highlights the issue here.

The bad news about the traditional management of French restaurants

In recent years, top chefs from
Spain, the U.S. and even Denmark have been overtaking French ones on influential
"best restaurant" lists. French restaurants in New York City have
been closing. Sales of French wine plummet in this country.

As in the rest of the business
world, the great restaurants of the 20th Century are supported by a sycophantic
mainstream culinary press, which give all the attention to expensive, overly
formal restaurants that focused on luxurious décor. In other words, restaurants
out of touch with today's diner. Result: when diners are not delighted, they go
elsewhere.

France's rigid and proud
traditional management explains why chefs in other countries, such as Spain and
Britain, have dominated in the latest restaurant styles such as the
rule-breaking creation of molecular gastronomy. It explains why French
restaurants remain formal and staid while consumers flocked to small-plate
meals. French haute cuisine, with its emphasis on luxury ingredients such as
caviar and foie gras, have also clashed with the popular localist movement that
elevates things like the humble carrot to culinary greatness.

Radical management and innovation in French cuisine:

Now Omnivore and Le Fooding
are publishing guide books that highlight a new generation of chefs in France
and holding high-profile food festivals that attract top chefs.

Just as Harvard Business Review
remains ossified in the general management world, so the Michelin Guide and
even the once-radical Gault Millau represent an unshakeable commitment to 20th
Century cuisine. "Michelin and Gault Millau are really institutions in
France and they don't show any modernity or capacity to change," says Mr.
Baussaron, brand manager for Badoit, and co-sponsor of Omnivore. The famous old
three-star restaurants now cater mainly to tourists and foreigners. These
restaurants are living off their history. Unless they will change, they will
die.